To determine the best definition of marginal cost among the given options, let's analyze each choice:
1. The possible income from producing an additional item: This term describes potential revenue but does not specifically address any costs involved. It indicates the amount of money that might be earned from production but is not related to the cost of producing that additional unit.
2. The price of producing one additional unit of a good: This option directly refers to the marginal cost. Marginal cost is defined as the expense incurred by producing one more unit of a product or service. It is a critical concept in economics that helps businesses determine the optimal level of production.
3. The additional income gained from selling an additional good: This describes marginal revenue rather than marginal cost. Marginal revenue is the extra revenue from selling one additional unit of a good or service.
4. The financial gain from business activity minus expenses: This defines profit, not marginal cost. Profit is the total revenue minus the total expenses.
Given these analyses, the correct definition of marginal cost is:
- The price of producing one additional unit of a good.
Therefore, the best definition of marginal cost is the second option: the price of producing one additional unit of a good.
